Cautious welcome by exporting community to sops

New Delhi, July 12 (UNI) The exporting community today cautiously welcomed the Rs 2,000 crore package announced by the Government to salvage exports from the almost secular appreciation of the rupee against the dollar.

They said while the package will provide a cushion to exporters more should have been done to compensate the complete erosion of profitability on account of the northward movement of the Rupee.

The exporters demanded an additional duty drawback of five per cent and said interest subvention should have been higher as the benchmark prime lending rate (PLR) has been on a southward journey.

Mr Ganesh Kumar Gupta, President, Federation of Indian Export Organisations (FIEO) said the effectiveness of the increased Drawback Rates with effect from April 1, 2007 will provide some cushion to exporters whose profitability has been eroded continuously due to appreciation of Rupee.

He also welcomed the decision to reduce pre and post shipment credit rates by further two per cent for specified nine sectors of exports and all SMEs.

However, FIEO Chief reiterated that the Drawback Rates should have been increased by additional five per cent to address the losses to the exporters on account of appreciation of Rupee as suggested by the Minister of Commerce and Industry. The two per cent drop in the interest rate would not be of much help due to southward movement of PLR in last one year.

Apparel Export Promotion Council Chairman Vijay Agarwal also welcomed the move of the finance ministry, but offered suggestion to improve the export performance as their competitiveness has been eroded following the appreciation of the Rupee and depreciation of some other currencies.

Garment Exporters Association Secretary General Surinder Anand thanked the Finance Minister for including readymade garments among the nine sectors that are to be given relief across the board on account of interest subvention.

Mr Anand said this has been a long standing demand of the community of garment exporters, though the package should have been announced a little earlier.

The GEA have been pressing the Government to provide relief to the garment exporting community which had been reeling under the rising Rupee.

UNI